Does Zerodha provide leverage against the available funds in my trading account?
Zerodha provides you leverages when you place intraday orders (MIS and Cover Orders) based on the prescribed peak margin requirements by SEBI and the exchanges. You can check the leverages offered for intraday orders in this bulletin. There is no interest charged for these leverages.
We are yet to start margin funding or MTF, through which customers can buy and hold stocks overnight with funding from the broker.
We have had customers reach out saying that a few stockbrokers provide additional funding to clients against the funds available in the client’s accounts via an NBFC and charge interest on the availed margin. Such a practice is a gross violation of regulations and Zerodha or any other broker aren’t permitted to do this. Check this circular from NSE. Here is an extract of the circular for your quick reference.
Trading members shall not be a party to any agreement or arrangement, directly or indirectly, entered into between their clients and any person including their subsidiary / holding company or group or associate company, to fund any secondary market transactions or margin requirements in respect of transactions executed by the trading members on behalf of their clients, or recognize or act in accordance with any such agreement or arrangement entered into by the trading members’ clients with any person.
Trading members shall not entertain any instructions to trade in securities or transfer funds or securities, from any entity other than the clients, by prior arrangement or otherwise to facilitate financing of clients’ transactions or margin requirements in respect of the transactions. Any financing arrangement with a general authorization by the clients is not permitted.
Trading members shall not otherwise finance or act as a conduit or front for financing any secondary market transactions or margin requirements in respect of the transactions entered into by their clients, directly or indirectly except in accordance with the regulatory provisions of Margin Trading Facility and Securities Lending and Borrowing.
Given the above instructions by the exchange, we do not offer any additional intraday funding or leverages to the client.